European Court of Justice (ECJ)

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The European Court of Justice (ECJ) has recently decided that the Working Time Directive (WTD) imposes an obligation on employers in all EU member states to record all working time, not just excess hours or overtime. This marks a significant departure from standard practice and may mean that employers will, in future, be required to implement systems that record workers’ time.

Background

In Confederación Sindical de Comisiones Obreras, the ECJ considered the provisions concerning rest periods and the weekly working hours limit under the WTD. In this case, a number of trade unions brought a group action against the employer, seeking to obtain a declaration that the employer was under an obligation to set up a system recording the actual amount of time worked each day. This system should, the claimants argued, make it possible to check that the working times laid down in legislation and collective agreements were properly adhered to. The employer did not have such a system in place, but it did operate a computer application that enabled whole-day absences to be recorded without measuring the duration of time worked by each worker or the number of overtime hours worked.

Article 3 WTD provides for a minimum period of daily rest (11 hours in any 24-hour period) while Article 5 provides for a minimum period of weekly rest (24 hours per period of seven days). The WTD also contains an upper limit of 48 hours for the average working time for each seven-day period, although UK employees can opt-out of this limit by written agreement.

The ECJ was asked to consider whether national Spanish law (which did not require every hour to be recorded) was sufficient to ensure the effectiveness of the working time limits laid out in the WTD, and if not, whether employers should be required to establish systems whereby the actual daily working time worked by full time employees is recorded.Continue Reading Recording working time: do changes lie ahead?

Does pay for regular voluntary overtime need to be included in the calculation of holiday pay? Yes, says the Court of Appeal in a decision which confirms several prior Employment Appeal Tribunal (EAT) decisions that the entitlement to holiday pay under the Working Time Directive (WTD) must include pay for regular voluntary overtime. As we explain below, the outcome is more complex in practice as tribunals will now have to decide, on a case-by-case basis, whether a particular pattern of voluntary overtime is sufficiently regular and settled to fall within the category of regular voluntary overtime.

Background

Under article 7 of the WTD, EU member states must ensure that workers have the right to at least four weeks’ paid annual leave. The WTD does not expressly specify how statutory holiday pay is to be calculated. However, it is well established that holiday pay should equate to ‘normal remuneration’. Normal remuneration has been interpreted to include not only basic salary but also remuneration which is intrinsically linked to the tasks the worker regularly performs.

The EAT held in Bear Scotland v. Fulton and others that compulsory non-guaranteed overtime (i.e., overtime that is compulsory for the employee if the employer requires it but which is not guaranteed to be provided) must be included in the calculation of holiday pay. The EAT also held, in Dudley Metropolitan Borough Council v. Willetts and others, that holiday pay should correspond to normal remuneration so that workers should not be discouraged from taking their annual leave entitlement; in other words, pay during holidays should not be below the rate a worker would expect to receive had they been working. For a payment to be treated as normal, it should have been made over a sufficient period of time on a regular or recurring basis.

The calculation of holiday pay has also been considered by the European Court of Justice (ECJ), which held in Hein v. Albert Holzkamm GmbH & Co. KG that remuneration received for overtime does not, in principle, form part of normal remuneration. However, where the employment contract requires the worker to work overtime on a broadly regular and predictable basis then that overtime should be included in the calculation of holiday pay.
Continue Reading Court of Appeal: holiday pay must include regular voluntary overtime